- RedMed quarterly delivered in key areas
- Forex pressures continue to impact
- Growth outlook still solid, diversification a benefit
- Buy ratings still dominate broker views

By Chris Shaw

Sleep disorder group ResMed ((RMD)) reported 4Q11 earnings last week and the result had been viewed as an important test given Flow Generator sales, a key market for the company, had been sliding in the US in previous quarters.

For BA Merrill Lynch the result was therefore a solid one, as US Flow Generator growth of 3% was better than the 2% forecast for the period. This suggests Bi-Level sales have now stabilised, while the result also offered evidence of a positive mix shift from CPAP to APAP or Auto-Set Home Sleep Testing models.

This is key for BA-ML, as the mix shift implies a progressive strengthening of earnings growth through FY12. It is this earnings growth outlook that underpins the stockbroker's Buy rating on the stock. UBS agrees, noting the 4Q result showed US flow generator sales have again turned positive, with this positive momentum likely to follow-on into FY12.